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Judgment
Chirag Bhanu Singh, Judge (Oral)
The petitioner has preferred an application under Section 147 of the Negotiable Instruments Act, 1881 (in short ‘NI Act’) seeking to compound the offences under Section 138 of the NI Act.
The petitioner had come to be convicted by the learned Additional Chief Judicial Magistrate, Rampur Bushahr, District Shimla, and consequently sentenced to simple imprisonment for six months and to pay compensation of Rs. 2,00,000/-. His conviction and sentence even came to be upheld by the learned Additional Sessions Judge, Rampur Bushahr, District Shimla, vide his judgment dated 12.06.2026.
Feeling aggrieved, the petitioner has preferred the present revision petition. This Court had directed the matter to be listed after four weeks, vide an order dated 21.09.2026.
Seemingly, in the meanwhile, the petitioner came to be arrested on 12.10.2026, and hence the present application. During the pendency of the present proceedings, the petitioner has amicably settled the matter. He has agreed to pay the entire compensation amount of Rs. 2,00,000/- to the respondent-bank. In pursuance thereto the petitioner has already paid an amount of Rs. 1,60,000/- to the respondent-Bank. In this behalf, the learned counsel for the petitioner has placed on record the original receipt, dated 16.10.2026.
The learned counsel for the petitioner further contends that the petitioner had deposited an amount of Rs.40,000/-before the trial Court in pursuance of the orders of the learned Additional Sessions Judge, Rampur Bushahr, dated 26.09.2026. The learned counsel would thus contend that in case the said amount is ordered to be released in favour of the respondent-Bank, the entire amount of Rs. 2,00,000/-, as agreed between the parties, shall stand paid.
The learned counsel for the respondent-Bank also submits that an amount of Rs.1,60,000/- stands deposited and in case the balance amount is ordered to be released in favour of the bank, the full and final amount shall stand paid to the respondent-Bank, and as such, the bank would not proceed with the matter any further.
I have heard learned counsel for the parties and gone through the record carefully.
Seemingly, the parites have now burried the hatchet. The learned counsel for the respondent-complainant also submits that the entire compensation amount shall stands received by the respondent-complainant, in case the amount of Rs.40,000/- lying deposited with the learned trial Court is released in the favour of the Bank.
The learned counsel for the petitioner submits that since the parties had agreed to settle the matter in full and final settlement of the claim, the petition deserves to be allowed and the petitioner is entitled to be acquitted and released.
Hon’ble Supreme Court, in case titled as “K.M. Ibrahim versus K.P. Mohammed and another, 2010 (1) SCC 798." has categorically gone on to hold that the offences under Section 138 of the N.I. Act, can be allowed to be compounded even at the appellate stage.
The said view has been consistently followed from the year 2004, starting with Anil Kumar Haritwal versus Alka Gupta, reported in 2004 (4) SCC 366, in a series of judgments till K.M. Ibrahim’s case referred hereinabove (supra).
It would be apposite to reproduce para-9 of the K.M, Ibrahim’s case, which reads as under:-
“9.The golden thread in all these decisions is that once a person is allowed to compound a case as provided for under Section 147 of the Negotiable Instruments Act, the conviction under Section 138 of the said Act should also be set aside. In the case of Vinay Devanna Nayak (supra), the issue was raised and after taking note of the provisions of Section 320 Cr.P.C., this Court held that since the matter had been compromised between the parties and payments had been made in full and final settlement of the dues of the Bank, the appeal deserved to be allowed and the appellant was entitled to acquittal. Consequently, the order of conviction and sentence recorded by all the courts were set aside and the appellant was acquitted of the charge leveled against him.”
The Hon’ble Supreme Court thus, has categorically gone on to hold that Section 147 of the N.I. Act, does not in any way bar the parties from compounding an offence under the provisions of Section 138 of the N.I. Act, even at the appellate stage of the proceedings.
Thus, keeping in view the aforesaid judgment and facts and circumstances discussed herein-above (supra), the parties having indeed buried their differences, the matter having been compromised and the entire compensation amount having been agreed to be paid to the respondent, in full and final settlement of the claim, the parties are allowed to compound the offence and as a sequel, the judgments of the learned Courts below, are quashed and set-aside. The accused is acquitted of the charges. Since the petitioner is in custody, he be released forthwith, if not required in any other case, release warrants be issued accordingly. The amount of Rs. 40,000/- lying deposited with the learned trial Court is directed to be released in favour of the respondent-Bank.
The petition is disposed of accordingly, so also the pending application(s), if any.